Chapter Five. Solving Extensive-Form Games: Backwards Induction and Subgame Perfection

1995 ◽  
pp. 121-160
Keyword(s):  
Extensive Form ◽  
Extensive Form Games ◽  
Backwards Induction ◽  
Subgame Perfection

scholarly journals Implementation of Subgame-Perfect Cooperative Agreement in an Extensive-Form Game

2021 ◽  
Vol 14 ◽  
pp. 257-272
Author(s):  
Denis Kuzyutin ◽  
◽  
Yulia Skorodumova ◽  
Nadezhda Smirnova ◽  
◽  
...  
Keyword(s):  
Fishery Management ◽  
Solution Concept ◽  
Extensive Form ◽  
Game Tree ◽  
Extensive Form Games ◽  
Payoff Distribution ◽  
Novel Approach ◽  
Cooperation Incentives ◽  
Subgame Perfection ◽  
The Difference

A novel approach to sustainable cooperation called subgameperfect core (S-P Core) was introduced by P. Chander and M. Wooders in 2020 for n-person extensive-form games with terminal payoffs. This solution concept incorporates both subgame perfection and cooperation incentives and implies certain distribution of the total players' payoff at the terminal node of the cooperative history. We use in the paper an extension of the S-P Core to the class of extensive games with payoffs defined at all nodes of the game tree that is based on designing an appropriate payoff distribution procedure β and its implementation when a game unfolds along the cooperative history. The difference is that in accordance with this so-called β-subgameperfect core the players can redistribute total current payoff at each node in the cooperative path. Moreover, a payoff distribution procedure from the β-S-P Core satisfies a number of good properties such as subgame efficiency, non-negativity and strict balance condition. In the paper, we examine different properties of the β-S-P Core, introduce several refinements of this cooperative solution and provide examples of its implementation in extensive-form games. Finally, we consider an application of the β-S-P Core to the symmetric discrete-time alternating-move model of fishery management.

Statistical Backwards Induction: A Simple Method for Estimating Recursive Strategic Models

2007 ◽  
Vol 16 (1) ◽  
pp. 21-40 ◽  
Author(s):  
Muhammet Ali Bas ◽  
Curtis S. Signorino ◽  
Robert W. Walker
Keyword(s):  
Financial Markets ◽  
Standard Errors ◽  
Parameter Estimates ◽  
Extensive Form ◽  
Speculative Attacks ◽  
Simple Method ◽  
Extensive Form Games ◽  
Backwards Induction ◽  
Consistent Parameter

We present a simple method for estimating regressions based on recursive extensive-form games. Our procedure, which can be implemented in most standard statistical packages, involves sequentially estimating standard logits (or probits) in a manner analogous to backwards induction. We demonstrate that the technique produces consistent parameter estimates and show how to calculate consistent standard errors. To illustrate the method, we replicate Leblang's (2003) study of speculative attacks by financial markets and government responses to these attacks.

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